GLOBAL - Fighting between life insurers and asset managers threatens to further stall the reform process in Korea.
“The incumbents in the group, be they the insurance companies or securities houses, are trying to very openly say, ‘hands off to everyone’,” said Franklin Templeton country head Korea, Michael Reed. “They are trying to design the rules and the markets to suit them.”
The initial draft of the reforms states that only life insurance companies and banks can effectively be trustees of these assets. For DC plans, the fund management can be outsourced to external houses, but the fund management community has its doubts over the prospect of this happening.
“Life insurance companies and banks will try to manage everything internally and you are not going to get the expert management,” said SEI Asset Korea CEO, Thae Khwarg.
“The trustee or administrative function is not that difficult. The major thing that a CFO of a corporate has to do is to find the right fund manager, so you are putting the focus on the wrong thing. You are saying, you choose the administrator, when you should be choosing the fund manager.”
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